Federal funding by state per capita ranges widely: in FY 2024, federal grant funding alone ran from about $1,500 per person in the lowest-receiving states to nearly $7,000 in the highest, with a national average near $2,800. Grants are only one slice. Once Social Security, Medicare, defense contracts, and federal payroll are added in, total federal outlays reached roughly $7 trillion in FY 2025, and the per-person share varies enormously depending on where you live.1Congressional Budget Office. CBO Releases Infographics About the Federal Budget in Fiscal Year 2025 Virginia, New Mexico, Alaska, and West Virginia consistently sit near the top; wealthier, younger, more urbanized states sit near the bottom.
What Counts as Federal Funding to a State
Before comparing states, it helps to know what’s actually being counted. Federal money flowing into a state comes from several distinct streams, and each one behaves differently.
- Direct payments to individuals. Social Security accounted for about 18.5% of federal outlays in FY 2025 ($1.3 trillion), and Medicare another 11.9% ($835 billion). Together, roughly 30% of all federal spending goes straight to retirees, disabled individuals, and healthcare providers.
- Grants to state and local governments. Medicaid is the largest, with the federal share set by the Federal Medical Assistance Percentage (FMAP) formula. Others cover highways, transit, education, and housing.
- Procurement contracts. The federal government buys goods and services from private companies, from weapons systems to IT. States with major bases or defense contractors capture a heavy share.
- Federal employee wages. Civilian federal workers, active-duty military, and staff at national parks, research labs, and other facilities.
- Other payments. Agricultural subsidies, veterans’ disability compensation, and Payments in Lieu of Taxes to counties containing federal land. PILT distributed $644.8 million to more than 1,900 counties in FY 2025.2Congressional Research Service. The Payments in Lieu of Taxes (PILT) Program – An Overview
Which States Receive the Most Per Person
Total dollars and per capita dollars produce very different rankings. California receives the largest total amount of federal funding of any state, but its population dilutes the per-person figure. Virginia receives the most net federal funding per resident, driven by defense contractors and federal agencies clustered around Washington, D.C.
On the receiving end of the balance-of-payments ledger for FY 2024, Washington, D.C. led all jurisdictions at $25,254 per resident, followed by New Mexico at $15,448 and Alaska at $14,965. Virginia topped the list in total dollars received at $89.0 billion, largely from defense spending and federal payroll rather than poverty-related programs. West Virginia, along with New Mexico and Alaska, consistently appears near the top of per capita recipient lists.
The states at the top share a recognizable profile: heavy military presence, large federal workforces, significant federal land holdings, or older and lower-income populations that draw heavily on entitlement programs.
Why the Gaps Are So Wide
Age and Poverty Do Most of the Work
The single biggest driver of per capita federal spending is the age of a state’s population. Social Security and Medicare are the two largest federal programs, and both flow overwhelmingly to older Americans. A state where 20% of residents are over 65 will draw far more per person in direct payments than a state where that figure is 13%. No discretionary decision is involved; the money follows eligible people.
Poverty rates work similarly through Medicaid. The FMAP formula ties the federal matching rate to a state’s per capita income relative to the national average. For FY 2026, FMAP rates range from the statutory floor of 50% in wealthier states up to 76.90% in Mississippi, with U.S. territories receiving up to 83%.3MACPAC. Federal Medical Assistance Percentages and Enhanced Federal Medical Assistance Percentages by State FYs 2023-2026 A state with a 77% FMAP gets roughly $3 in federal Medicaid dollars for every $1 it spends. A state at the 50% floor gets a dollar-for-dollar match. That single formula creates enormous per capita gaps between wealthy and low-income states.
Military Bases and Defense Contracts
States with large bases, shipyards, and defense contractors take in substantial procurement dollars and personnel salaries that inflate per capita totals. This is the main reason Virginia consistently ranks at or near the top: military spending there runs thousands of dollars above the national per-person average, and Department of Defense contracts with private companies account for a large share. Alaska and Hawaii rank disproportionately high for the same reason relative to their small populations.
Federal Land and Facilities
The federal government owns significant acreage across western states, and managing it costs money. National forests, national parks, research laboratories, and military testing ranges all require ongoing spending on staff, maintenance, and security. Counties with large tracts of tax-exempt federal land also receive PILT payments to offset lost property tax revenue.2Congressional Research Service. The Payments in Lieu of Taxes (PILT) Program – An Overview Veterans’ benefits add to the effect: states with large veteran populations receive more in disability compensation and VA healthcare payments.4Veterans Affairs. VA Disability Compensation
Concentration of Federal Employment
A handful of states absorb a disproportionate share of federal civilian and military payroll simply because that’s where agencies are headquartered or operate major facilities. Maryland and Virginia benefit from proximity to the capital. States with large federal research complexes, energy sites, or administrative centers see a similar bump. Those salaries show up in per capita figures whether or not the work performed has anything to do with the state’s own residents.
Donor States and Recipient States
Per capita spending is only half the picture. Balance of payments compares total federal taxes paid by a state’s residents and businesses against total federal spending received. Pay in more than you get back, and you’re a donor state. Get back more than you pay in, and you’re a recipient. The IRS publishes gross tax collections by state, which forms one side of the ledger.5Internal Revenue Service. IRS Tax Stats – Gross Collections by Type of Tax and State
In FY 2024, only 19 states were net contributors. The largest total net donors were California ($275.6 billion), New York ($76.5 billion), and Texas ($68.1 billion). On a per capita basis, the biggest net donors were Nebraska ($9,531 per person), Minnesota ($8,702), and Washington State ($7,139). High-income populations and relatively little federal spending explain most of that pattern.
These figures move year to year. A single large defense contract or a spike in disaster relief can swing a state’s balance. The structural pattern has been stable for decades, though. Wealthier, more urbanized states tend to be donors. States with older populations, more military infrastructure, or lower per capita incomes tend to be recipients.
How the Per Capita Figure Is Calculated
The math is straightforward: total federal spending in a state divided by state population. The judgment calls sit inside those two inputs.
Federal spending is tracked two ways. An obligation is a binding commitment made when an agency signs a contract or awards a grant. An outlay is the actual cash disbursement, which may happen immediately or years later.6USAspending.gov. Obligations vs Outlays Most per capita analyses use obligations because they reflect current-year decisions about where resources are being directed. Some use outlays for a more concrete picture of money actually spent. The choice can change rankings.
Population figures come from the Census Bureau, either the most recent decennial census or annual estimates published between census years. Those estimates carry uncertainty, especially in fast-growing or shrinking states, so per capita figures are approximations rather than precise accounting.
Pass-through funding adds another wrinkle. When Washington awards a grant to a state agency, that agency often distributes portions to counties, nonprofits, or other subrecipients. The full grant amount gets credited to the state where the primary recipient sits, even if some money ultimately flows elsewhere. Per capita figures can therefore slightly overstate spending in states that house large grant-administering organizations and understate it in states whose local entities receive pass-through dollars.
Where to Find the Numbers
USASpending.gov is the best starting point. Its State Profiles section shows obligations and outlays for any state, broken down by fiscal year, federal agency, and award type.7USAspending.gov. U.S. State Spending Profiles The site provides raw totals rather than per capita calculations, so you’ll need to pair the spending data with Census Bureau population estimates to compute the per-person figure yourself.8USAspending.gov. About USAspending.gov
For balance-of-payments analysis, the Rockefeller Institute of Government publishes regular reports comparing taxes paid to spending received at the state level, with its most recent report covering 2025.9Rockefeller Institute of Government. Balance of Payments Portal The Census Bureau previously published Consolidated Federal Funds Reports that served a similar purpose, but that program was terminated after FY 2010.10U.S. Census Bureau. Consolidated Federal Funds Reports The archived data still supports historical comparisons; for anything recent, USASpending.gov and the Rockefeller Institute are the main resources.